Home cover at half the cost

Price competition among motor insurers, travel insurers, even for life insurance, has been well documented, but insurance brokers also claim it is possible to make significant savings on the cost of protecting house contents.

Broker Premium Search says some rates have fallen by as much as 46 per cent since last December, and it expects the trend for lower rates to continue during coming months. Falling theft claims have helped to keep insurance costs down, it says.

Another broker, Insurance Advice, which has just launched a free telephone service that aims to take much of the hassle out of finding cheaper contents insurance, claims some people could be paying five times as much as they need to.

The brokers say many of the people who are missing out are insured with the building society they took out their mortgage with, and that the societies have often failed to reduce their rates to the degree of other insurers.

As an example, Insurance Advice says pounds 25,000 of contents cover, including accidental damage, for a 55-year-old man living in a three-bedroomed house in Essex, could cost as little as pounds 65.60 with Churchill, the direct arm of Winterthur Insurance, or as much as pounds 327.26 with Nationwide building society. Philip da Silva, a director of Premium Search, which also offers free telephone quotes based on a panel of insurers, says: "We cannot emphasise enough the money people can save by rebroking their insurance and not simply renewing it."

While insurers do offer no-claims discounts to encourage policyholders to renew their insurance with the same company every year, renewal notices should normally serve as a reminder to shop around. Insurance Advice will search through its database and provide the names of three insurers it thinks will provide a cheaper quote to callers. The three insurers then contact the individual with the quote. The broker reckons its database covers companies comprising 50 per cent of the market, though with the notable exception of Direct Line.

A number of factors affect the price of contents insurance: including where you live (city dwellers pay more than those in remote, low-crime regions such as Cornwall); age - the over-50s usually pay less because insurers think they will spend more time at home; no-claims discounts (typically 10 per cent after one year, 15 per cent after two, 20 per cent after three); and good security measures.

Insurance Advice also warns that just because a company offers cheap insurance for the structure of a building - policies which its service also covers - does not mean it also offers cheap contents insurance, and vice versa.

Contacts: Home Advice, 0500 647005; Premium Search, 0800 109876.